The Mortgage Credit Availability index fell 0.7% to 110.7 in September, according to information from AllRegs analyzed by the Mortgage Bankers Association. In August, the index was 111.50 and in July it hit a peak of 112.27.
MBA vice president of research and economics Mike Fratantoni said the same factors which impact the index in August continued in September, namely the dropping of longer-term products and interest-only products from the menu. This is in preparation for the implementation of the qualified mortgage rule in January.
However, offsetting this tightening has been some increased willingness to offer higher LTV loans, particularly to jumbo borrowers.
Previously, Envoy Mortgage executive vice president David Zugheri commented that in the new environment, lenders will compete on price and service but not credit (lower underwriting standards).